Stocks Fall and Oil Surges by More Than 9% Following Israel’s Strike on Iran

Global financial markets were thrown into chaos on Friday after Israel’s military strike on Iran, leading to a surge in oil prices and a rush toward safe-haven assets. This escalation introduces new uncertainty into a global economy already strained by the unpredictable trade policies of U.S. President Donald Trump.

Crude oil futures jumped nearly 9%, with Brent rising to $75.65 per barrel and WTI reaching $74.47 per barrel, marking the largest intraday gains since Russia’s invasion of Ukraine in 2022. Gold also climbed 1.5% to about $3,434 per ounce, nearing its April record high.

Asian stock markets experienced significant declines, mirroring a selloff in Wall Street futures. Japan’s Nikkei fell 1.3%, South Korea’s KOSPI dropped 1.1%, and Hong Kong’s Hang Seng declined 0.8%. U.S. S&P E-mini futures slid 1.7%, while Nasdaq futures dropped 1.8%.

Charu Chanana, chief investment strategist at Saxo, noted that increased geopolitical uncertainty is likely to push crude oil prices and safe-haven assets higher if tensions continue. Jessica Amir from MooMoo commented that the geopolitical situation could trigger a anticipated market correction.

Israel’s strike targeted Iran’s nuclear facilities and military leaders, prompting a state of emergency. Iranian state media confirmed the death of Revolutionary Guards Commander Hossein Salami, with Israeli officials suggesting other military figures were also killed.

U.S. Secretary of State Marco Rubio stated that Washington was not involved in Israel’s actions, urging Iran not to target U.S. interests. Tensions had been escalating due to stalled nuclear deal discussions, with further talks scheduled in Oman. In the rush for safer assets, the yield on 10-year U.S. Treasuries fell to 4.31%, a one-month low. The Swiss franc and yen gained against the U.S. dollar, while the dollar index rose by 0.5%.

Analysts expect risk sentiment to deteriorate as traders await news on Iran’s potential retaliation, with concerns about disruptions in oil supply through the Strait of Hormuz remaining a significant worry for traders.